We will create an insurance program and legal protections to limit the liability of developers willing to clean up land they did not pollute
In most cases, brownfields are no longer owned by the person or company who caused the contamination in the soil. But if a developer cleans up land and builds on it, under current State law the developer becomes liable for any harm that might remain, and for the potential costs of any future remediation. For sites that make it into the BCP, and complete it successfully, the State limits these costs and risks to the site owner; but the uncertainty of gaining entrance to that program still leaves many developers fearful that proposing redevelopment, or even just testing their land for contaminants, could leave them vulnerable. As a result, some properties linger either as vacant sites or with obsolete uses, reducing neighborhood quality of life.

To reduce this exposure, landowners are increasingly purchasing brownfields liability insurance that helps protect them against undiscovered contamination and unexpected cleanup costs. But such insurance is currently only available after contamination levels have been tested and confirmed, which is already an expensive and time-consuming task.

In order to get more landowners to consider redevelopment and embark on initial testing, we will work with private insurers to develop insurance policies-with a $10 million City contribution-that will protect landowners before any testing has been done. While such insurance would not cover the full costs of a clean up, it could protect the landowner against the worst possible scenarios and encourage redevelopment planning. This will be of particular value to those developers-like affordable housing builders and small-scale developers-whose access to capital is limited, and who cannot afford to cover the initial stages of a cleanup effort without receiving the benefit of State tax credits.

We will also seek the passage of a new State law that would protect new purchasers from liability for unknown contaminants in land they purchase for redevelopment. Currently, if a purchaser buys land that turns out to be contaminated, the purchaser can be held liable for cleanup costs even in excess of the land's value, whether or not the responsible polluter can be found and made to pay. This makes buyers afraid of certain sites. This exemption, similar to a clause in existing Federal law, would reduce the liability of those who buy land to clean it up, encouraging more developers to generate plans for more sites.

Progress (as of 4/22/08):
The City has conducted interviews and research on existing and proposed financial incentive programs to determine what would help spur the highest levels of remediation. Interviews with insurance representatives have revealed that cost cap policies that guarantee the price of a site remedy are costly and contingent on State approval of a site remedy. The Administration will continue to meet with stakeholders on the proposed program and evaluate the most effective insurance and legal protection program design.